Thursday Morning Livestock Market Update - Futures Struggle to Maintain Rally

GENERAL COMMENTS:

Feeder cattle futures were lower Wednesday as cash prices have been slipping across the country this week. The fall green tag sales have started and there will be an influx of weaned calves ready to hit the feedlot. Slaughter numbers were higher versus last week but still behind a year ago. Boxed beef prices have started to slip lower.

Hogs are struggling to find reason to hold support. Monday's rally was really just following along as a cheaper alternative to their bigger four-legged protein friends, but it has not been enough to break this bearish trend.

Overnight, the House approved legislation to end the 43-day shutdown of the federal government, the longest shutdown in history.

	BULL SIDE		BEAR SIDE
1)	An end to the government shutdown is bullish for commodities. An approved budget brings more spending, possible inflation for prices, and a happy stock market.	1)	When the Commitments of Traders report is finally released after an end to the government shutdown, traders speculate that managed funds have liquidated a large portion of their long position in cattle. If we discover they have sold a larger portion than expected, that could bring fear selling for the remainder of the long-term long positions.
2)	November feeder cattle futures did rally Wednesday while the rest of the cattle complex was lower. This signals futures may end up coming up to the cash index rather than dragging the index down to the futures level as we approach the end of the contract trading.	2)	Mexican border reopening is one of the largest bearish risks and we cannot predict when it will happen; but once the screwworm issue is under control, we can count on an influx of cattle into the country.
3)	If cattle rally, they could bring hog prices up with them.	3)	Pork cutout prices have taken a big hit over the last couple of days. This is not a positive indication for what is to come.
4)	Holiday and baking season is upon us, and ham, roast and pork ribs are popular choices.	4)	Without new positive news, hogs are struggling to find reason to support prices here. They are dependent on a continued rally from cattle to find any positive ground here.